3M 2012 Annual Report Download - page 64
Download and view the complete annual report
Please find page 64 of the 2012 3M annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.58
In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures About Fair Value Measurements, that
amends pre-existing disclosure requirements under ASC 820 by adding required disclosures about items transferring into
and out of levels 1 and 2 in the fair value hierarchy; adding separate disclosures about purchases, sales, issuances, and
settlements relative to level 3 measurements; and clarifying, among other things, the pre-existing fair value disclosures
about the level of disaggregation. For 3M, this ASU was effective for the first quarter of 2010, except for the requirement
to provide level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which was effective beginning
the first quarter of 2011. Since this standard impacts disclosure requirements only, its adoption did not have a material
impact on 3M’s consolidated results of operations or financial condition.
In April 2010, the FASB issued ASU No. 2010-17, Milestone Method of Revenue Recognition—a consensus of the FASB
Emerging Issues Task Force that recognizes the milestone method as an acceptable revenue recognition method for
substantive milestones in research or development arrangements. This standard requires its provisions be met in order for
an entity to recognize consideration that is contingent upon achievement of a substantive milestone as revenue in its
entirety in the period in which the milestone is achieved. In addition, this ASU requires disclosure of certain information
with respect to arrangements that contain milestones. For 3M, this standard was effective prospectively beginning
January 1, 2011. The adoption of this standard did not have a material impact on 3M’s consolidated results of operations
or financial condition.
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This standard clarifies guidance on how to
measure fair value and is largely consistent with existing fair value measurement principles. The ASU also expands
existing disclosure requirements for fair value measurements and makes other amendments. For 3M, this ASU was
effective prospectively beginning January 1, 2012. The adoption of this standard did not have a material impact on 3M’s
consolidated results of operations or financial condition.
In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, and in December 2011 issued
ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items Out of
Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. These standards require
entities to present items of net income and other comprehensive income either in a single continuous statement, or in
separate, but consecutive, statements of net income and other comprehensive income. The new requirements do not
change which components of comprehensive income are recognized in net income or other comprehensive income, or
when an item of other comprehensive income must be reclassified to net income. Also, the earnings-per share
computation does not change. However, the option under previous standards to report other comprehensive income and
its components in the statement of changes in equity was eliminated. For 3M, these standards were effective
retrospectively beginning January 1, 2012, with early adoption permitted. 3M adopted these standards in the fourth
quarter of 2011. Since these standards impact presentation and disclosure requirements only, their adoption did not have
a material impact on 3M’s consolidated results of operations or financial condition.
In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. Under this standard, entities
testing goodwill for impairment now have an option of performing a qualitative assessment before having to calculate the
fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, that the fair value of the reporting
unit is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is required. Otherwise,
no further impairment testing is required. For 3M, this ASU was effective beginning January 1, 2012, with early adoption
permitted under certain conditions. The adoption of this standard did not have a material impact on 3M’s consolidated
results of operations or financial condition.
In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities, and in
January 2013 issued ASU No. 2013-01, Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities. These
standards create new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements
associated with its derivative instruments, repurchase agreements, and securities lending transactions. Certain
disclosures of the amounts of certain instruments subject to enforceable master netting arrangements would be required,
irrespective of whether the entity has elected to offset those instruments in the statement of financial position. For 3M,
these ASUs are effective January 1, 2013 with retrospective application required. Since these standards impact disclosure
requirements only, their adoption will not have a material impact on 3M’s consolidated results of operations or financial
condition.
In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. Under this
standard, entities testing long-lived intangible assets for impairment now have an option of performing a qualitative
assessment to determine whether further impairment testing is necessary. If an entity determines, on the basis of
qualitative factors, that the fair value of the indefinite-lived intangible asset is more-likely-than-not less than the carrying